Original Notice.

Preproposal statement of inquiry was filed as WSR 00-03-038 and 00-03-037.

Title of Rule: WAC 308-91-090, reciprocity and proration and WAC 308-77-045, 308-77-155, 308-77-165, 308-77-170, 308-77-180, 308-77-240, 308-77-265, 308-77-270, and 308-77-280, special fuel tax rules.

Purpose: 1. To meet the criteria set forth in Governor Locke's Executive Order 97-02.

2. To clarify rules and help make them more comprehensible.

Statutory Authority for Adoption: Chapters 46.87 and 82.38 RCW.

Summary: Amending WAC 308-91-090 Leased and rented vehicles, 308-77-155 On board computers or recording devices, 308-77-165 Export sales, 308-77-170 Metric measurement, 308-77-180 Appeals, 308-77-240 Records for refund claims, 308-77-265 Tax exempt losses, and 308-77-280 Natural gas, propane -- Decal as evidence of payment of annual license fees; and repealing WAC 308-77-045 Expiration of license and 308-77-270 Repealer.

Reasons Supporting Proposal: Meet criteria supporting Governor Locke's Executive Order 97-02.

Name of Agency Personnel Responsible for Drafting: Thao Pham-Manikhoth, 2424 Bristol Court S.W., 664-1844; Implementation and Enforcement: Betty Mickelson, 2424 Bristol Court S.W., 664-1843.

Name of Proponent: , governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The anticipated effects will be a clarification of the above mentioned requirements.

Proposal Changes the Following Existing Rules: Clarify sections needed and repeal those no longer required.

No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement is not required pursuant to RCW 19.85.030 (1)(a). The proposed rule making does not impose more than a minor cost on businesses in an industry.

RCW 34.05.328 does not apply to this rule adoption. The contents of the proposed rules are explicitly and specifically dictated by statute.

Hearing Location: Highways-Licenses Building, Conference Room 107, 1125 Washington Street S.E., Olympia, WA 98507, on June 27, 2000, at 10:30 a.m.

Assistance for Persons with Disabilities: Contact Mark C. Roberts by June 26, 2000, TTY (360) 664-8885 or (360) 902-3759.

Submit Written Comments to: Mark C. Roberts, Rules Coordinator, Prorate and Fuel Tax Services, P.O. Box 2957, Olympia, WA 98507-2957, fax (360) 664-0831, by June 26, 2000.

Date of Intended Adoption: July 25, 2000.

May 10, 2000

Thao Pham-Manikhoth, Administrator

Prorate and Fuel Tax Services

OTS-4018.1

AMENDATORY SECTION(Amending WSR 94-13-012, filed 6/2/94, effective 7/3/94)

WAC 308-91-090
Leased and rented vehicles.

(((1))) How are leased or rented vehicles registered? The registration of leased or rental passenger vehicles will be conducted under ((either)) the provisions of chapter 46.16 RCW ((or under the provisions, currently identified as Article XI -- registration of rental vehicles, of the international registration plan (IRP) as now written or hereafter amended.      Rental or leased vehicles under this section include: )). Trucks, tractors, and truck-tractors; trucks of one-way fleets (less than 26,000 pounds gross weight); trailers and semitrailers (exceeding 6,000 pounds gross weight), and utility trailers (not exceeding 6,000 pounds gross weight)((, and passenger cars (for the purpose of these rules, motorhomes and travel trailers are treated the same as passenger cars))) may be registered under the provisions of Article XI of the International Registration Plan (IRP).      In addition to the certificate of registration (cab card) or a photocopy ((thereof)), a copy of the rental/lease agreement must be carried in the rental/leased vehicle or if it is a nonpowered vehicle, the vehicle providing the motive power for the combination.      Refer to WAC 308-91-030 for the definition of terms used in this section.

(((2) Owners of rental vehicles engaged in the business of renting passenger cars in this state may request the approval of the department to apportion the registrations of the rental fleet under the provisions of the IRP by making application to the department at least thirty days prior to the start of each calendar year.      Applications will be submitted on forms furnished by the department.

(a) To determine the percentage of total fleet vehicles that shall be registered in this state, divide the gross revenue received in the preceding year for use of such rental vehicles arising from passenger car rental transactions occurring in this state by the gross revenue received in the preceding year for the use of such rental vehicles arising from passenger car rental transactions occurring in all jurisdictions in which such vehicles were operated (the rental transaction location is deemed to be where the vehicle first comes into possession of the user).      The resulting percentage shall be applied to the total number of passenger cars in the fleet and that figure shall be the minimum number of rental passenger cars that shall be fully licensed in the state of Washington during the calendar year.

(3) Owners of rental vehicles engaged in the business of renting passenger cars in this state who do not make application under the provisions of subsection (2) of this section or comply with the requirements of subsection (2) of this section must register all such vehicles under the provisions of chapter 46.16 RCW.

(4) In the absence of an agreement or arrangement to the contrary, rental or leased vehicles are not eligible for vehicle license reciprocity in the state of Washington except for the classes of vehicles and circumstances indicated below:

(a) Passenger cars and motorhomes currently and properly registered in another jurisdiction will be granted vehicle license reciprocity in this state if:

(i) The vehicle was rented by the vehicle operator from a location outside of the state of Washington; or

(ii) The vehicle was dropped off in Washington by the previous renter and is being rented for a one-way trip out of Washington.

(b) Trailers and semitrailers with a gross vehicle weight in excess of 6,000 pounds, trucks, truck tractors, tractors, and road tractors that are currently and properly registered in other jurisdictions will be granted vehicle license reciprocity in this state if:

(i) The vehicle is rented from a location within another jurisdiction; and

(ii) The vehicle registration certificate (cab card) or a photo copy thereof and a copy of the rental agreement is carried in the rental vehicle or in the vehicle providing the motive power for a combination of vehicles.

(5) Normally the lessee of a vehicle is responsible for its licensing under proportional registration subject to the following exceptions:

(a) Household goods carriers, wherein the agent is the lessor and the company is the lessee, may file and register as dual applicants.      Under this procedure, the lessor's fleet is prorated in its name and cab cards are issued in the name of both the lessor and lessee.      The application is based on the lessor's vehicles and the mileage accumulated by the lessor under its name and that of the lessee.      The application should be filed in the name of the lessee and the lessor.      For equipment owned and operated by owner-operators, other than service representatives, and used exclusively to transport cargo for the household goods carrier, the vehicle shall be registered by the carrier in the base jurisdiction of the carrier, but in both the owner-operator's name and that of the carrier as lessee, with the apportionment of fees according to the records of the carrier.

(b) Optional for rental vehicles referred to in subsection (1) of this section.))

[Statutory Authority: RCW 46.87.010(2).      94-13-012, § 308-91-090, filed 6/2/94, effective 7/3/94.      Statutory Authority: RCW 46.01.110 and 46.87.010(2).      91-06-093, § 308-91-090, filed 3/6/91, effective 4/6/91; 90-16-072, § 308-91-090, filed 7/30/90, effective 9/1/90.      Statutory Authority: RCW 46.87.010(2), 46.01.110 and chapters 46.87 and 46.85 RCW.      88-06-061 (Order PFT 8803), § 308-91-090, filed 3/2/88.      Statutory Authority: RCW 46.01.110.      84-02-019 (Order 739 DOL), § 308-91-090, filed 12/28/83.]

OTS-4017.1

AMENDATORY SECTION(Amending WSR 94-11-029, filed 5/9/94, effective 6/9/94)

WAC 308-77-155
On board computers or recording devices.

Can I use on board computers or recording devices to record mileage? Yes, the use of on board computers or recording devices for the production of mileage records required by ((chapter 82.38)) RCW 82.32.140 shall be governed by the requirements or procedures adopted by the International Fuel Tax Agreement (IFTA).

[Statutory Authority: RCW 82.37.170.      94-11-029, § 308-77-155, filed 5/9/94, effective 6/9/94.]

(1) ((Export sales shall be reported as "export sales, exported by purchaser" and supported by Schedule 10, Uniform Motor Vehicle Fuel Tax Multiple Schedule of Disbursements (Form FT 441-841), a separate schedule for each state or foreign jurisdiction of destination.      This Schedule 10 should be submitted with the tax report.      The department shall furnish the government agency of the state or foreign jurisdiction of destination a copy of this Schedule 10 to give information on the movement of untaxed fuel across state lines.

(2) In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the invoice must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place.)) How are tax exempt export transactions reported? Tax exempt export transactions must be supported by a special fuel tax multiple schedule of disbursements. A separate schedule is required for each state of destination. The department will furnish the government agency of the state or foreign jurisdiction of destination a copy of this schedule to give information on the movement of untaxed fuel across state lines. In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the schedule must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place.

(2) If I am not licensed or not required to file monthly tax returns, may I obtain a refund for tax paid export transactions? Yes, you may apply for a refund of the special fuel tax previously paid on special fuel sold tax exempt under this section.

[Statutory Authority: RCW 82.36.435 and 82.38.260.      98-24-011, § 308-77-165, filed 11/19/98, effective 1/1/99.      Statutory Authority: RCW 82.38.260.      90-13-038 (Order PFT 90-04), § 308-77-165, filed 6/14/90, effective 7/15/90.]

((Any requirement imposed by chapter 82.38 RCW or these rules regarding quantity measurement for inventory sales, purchases, use, or other purpose may, at the option of the licensee, be recorded in SI liters in lieu of United States gallons.))      Can I report using metric measurements? No, tax reports submitted to the department must show all figures converted from liters to gallons ((at the rate of 3.785 liters per gallon)) (3.785 liters per gallon) and from kilometers to miles (1.6093 kilometers per mile).

[Statutory Authority: RCW 82.38.260.      79-08-140 (Order 548 DOL), § 308-77-170, filed 8/1/79.]

((In any case of an account under audit where substantial agreement has not been reached between the taxpayer and the field auditor, the taxpayer may request a conference with the field audit supervisor or his designee prior to finalization and submission of the audit report.      Such conference is informal in nature, and is intended to clarify the issues in dispute, resolving them where possible, and in any event effecting agreement as to the facts and figures involved.      In those cases where agreement cannot be reached at this level as to the tax interpretations applied, the report will be finalized and submitted to Olympia, from where, following review and approval of the recommendations of the report, an assessment will be issued.)) (1) What are the appeal procedures? Any person issued a notice of assessment under this chapter for taxes, any penalties, and/or interest may contest the notice by petitioning the department for an informal hearing in lieu of proceeding directly to a formal hearing. A petition for an informal or formal hearing must be in writing and received by the department within thirty days after receipt of the notice of assessment. A petition will state the specific reasons why reassessment is sought and the amount of taxes, any penalties and/or interest that the petitioner believes to be due.

(2) What happens after the department receives my petition for an informal hearing? Upon receipt of your petition for an informal hearing, the department will establish the time and place for a hearing and notify you by mail at least ten days prior to the scheduled date. If you are unable to attend the scheduled hearing, you may request the department to reschedule it. You may appear in person or may be represented by any person you have authorized to present the case.

(3) What happens if I fail to appear for my informal or formal hearing without prior notification? Failure to appear may result in the loss of your administrative appeal rights.

(4) What happens following my informal hearing? The department will make a written determination in accordance with the Revised Code of Washington, rules, and policies established by the department.

(5) What if I do not agree with the department's informal hearing determination? You may, within thirty days after the receipt of the determination, appeal in writing and request a formal hearing by an administrative law judge. This process is governed by the Administrative Procedure Act, chapter 34.05 RCW. Your appeal must indicate the portions of the determination you feel are in error and state the reasons for believing the decision should be amended. You will be given at least ten days written notice of the time and location that has been established for the formal hearing. Following the formal hearing, an initial order by the administrative law judge will be issued and served upon you. If you are unable to attend the hearing on the date or time scheduled, you may request the department to reschedule the hearing.

(6) Can I appeal the initial order of the administrative law judge? Yes. The initial order of the administrative law judge must be appealed within twenty days of service. The appeal must specify the portions of the initial order to which exception is taken. The petition will be reviewed and a final order issued by the director.

[Statutory Authority: RCW 82.38.260.      79-08-140 (Order 548 DOL), § 308-77-180, filed 8/1/79.]

((Claimants shall maintain records which are sufficient to substantiate the accuracy of the claims.      Such records shall reflect all special fuel receipts, the gallons of fuel used in each type of equipment (both refundable and nonrefundable), other uses, loss and gain and inventories of fuel on hand.      The records must indicate the date of receipt or disbursements and identify the equipment into which the fuel is delivered or the purpose for which the fuel is used.      Failure of the claimant to maintain the required records or to permit examination by representatives of the department shall constitute a waiver of all rights to the refund.

The following rules shall govern records maintained to support claims for refund:

Special fuel purchased in small containers (tanks, cans, bottles, etc.) for nonhighway use (boats, tractors, mobile homes, trailers, etc.) and identified thus on purchase invoice will require no further records.

Invoices covering special fuel purchased, tax included, exclusively for use in motor vehicles will not be required in support of nonrefundable use but they shall be retained in the files of the claimant to account for fuel used in motor vehicles.

Where a claim covering the operation of a motor vehicle is entirely over private property and subject to refund, no record will be required other than that necessary to establish the source and number of gallons of special fuel used.)) (1) What records does the department require each claimant to retain? Each claimant must retain records that reflect all special fuel receipts, the gallons of fuel used in each type of equipment (both refundable and nonrefundable), other uses, loss and gain, and inventory on hand. The records must indicate the date of receipt or disbursements and identify the equipment into which the fuel is delivered or the purpose for which the fuel is used. Each claimant must also keep on highway and off highway mileage records for each licensed vehicle.

If the claimant maintains electronic invoices, paper copies of these invoices must be produced, upon request of the department. Failure of the claimant to maintain the required records or to comply with the department's request for examination of the records will waive all rights to a refund.

(2) What additional records must be maintained to support a refund claim for fuel withdrawn from bulk storage? Fuel purchased and delivered into bulk storage must have detailed withdrawal records that account for taxable and nontaxable use.

[Statutory Authority: RCW 82.38.260.      79-08-140 (Order 548 DOL), § 308-77-240, filed 8/1/79; Order 114 MV, § 308-77-240, filed 11/26/71.]

((A refund of special fuel tax previously paid may be claimed by notifying the department in writing as to the full circumstances and the amount of the loss.      Recovery for such loss or destruction must be susceptible to positive proof enabling the department to conduct such investigation and to require such information as may be deemed necessary.)) (1) What is considered a tax-exempt loss? Special fuel lost or destroyed in this state while being transported in the equipment of a licensee or in the equipment of a common or contract carrier for a licensee will be considered as a taxable distribution. Credit for or a refund of the special fuel tax paid may be taken when the licensee or the common or contract carrier furnishes acceptable proof of the exact quantity of fuel lost provided the documents in support of the loss are submitted to the department for approval as provided in RCW 82.38.180.

(2) What is acceptable proof of loss? Acceptable proof of loss will consist of the following:

(a) An affidavit by a person having direct knowledge of the circumstances of the loss, explaining the origin and destination of the shipment, the circumstances surrounding the loss, quantity of fuel lost, fuel salvaged, disposition of the salvaged fuel, and procedure(s) used in the determination of the quantity of fuel lost;

(b) A signed statement by a federal or jurisdictional official who has authority to investigate and/or deal with fuel losses or a witness to the loss;

(c) A bill of lading or other shipping document(s); and

(d) A statement by the licensee establishing ownership of the fuel at time of loss.

(3) Are deductions for losses from bulk storage allowed? Yes, special fuel that has been proven lost or destroyed, prior to distribution from a licensee's bulk storage plant, is allowed as a deduction.

(4) How long shall I retain my evidence substantiating my loss? Documentary evidence substantiating losses shall be retained by the licensee for five years.

(5) May I claim a deduction for unproven losses? No, unproven losses will be considered as a distribution and subject to the fuel tax.

(6) Am I liable for fuel taxes if one of my employees or agents cause a loss of fuel? Yes, charges for losses made by employees or agents of the licensee who fail to satisfactorily account for fuel shall be invoiced inclusive of the fuel tax. Other losses shall be substantiated by proof acceptable to the department.

[Statutory Authority: RCW 82.38.260.      79-08-140 (Order 548 DOL), § 308-77-265, filed 8/1/79; Order MV-137, § 308-77-265, filed 6/1/72.]

(1) ((All vehicles licensed in Washington as well as all vehicles proportionally registered in Washington which are powered by natural gas or liquefied petroleum gas commonly called propane, shall display at all times a decal issued by the department as evidence that the annual fee prescribed in RCW 82.38.075 has been paid in lieu of the fuel tax imposed by RCW 82.38.030.      This decal shall be displayed in a conspicuous place on the exterior of the vehicle on the rear bumper or near the fuel tank inlet.

(2) Persons engaged in converting vehicles to be powered by natural gas or propane may, at the completion of the conversion, fill the vehicle tank once with this fuel without requiring the decal.      The converted vehicle must display the decal as herein required before further fuel acquisitions can be made.

(3) Vehicles displaying a valid temporary registration permit which has been issued pending the completion of vehicle registration may be allowed to purchase fuel without displaying a decal.)) Do I pay fuel tax when I purchase natural gas or liquefied petroleum gas (propane) for my licensed vehicle? No, once you have licensed your vehicle as being powered by natural gas or propane, you will pay an annual license fee in lieu of the fuel tax.

(2) What proof is required to purchase natural gas or propane for my vehicle? A decal will be issued that must be displayed on your vehicle that allows the purchase of natural gas or propane. This decal must be displayed in a conspicuous place on the vehicle near the fuel supply tank.

[Statutory Authority: RCW 82.38.260.      81-14-048 (Order DOL 630), § 308-77-280, filed 6/30/81.]

     The following sections of the Washington Administrative Code are repealed:

WAC 308-77-045	Expiration of license.
WAC 308-77-270	Repealer.

© Washington State Code Reviser's Office